With an average cost per square foot of $16.11, Stamford, Conn., is the most costly U.S. market for commercial real estate, according to a new study by the Building Owners and Managers Association International. New York and San Francisco are also among the nation's priciest markets.
Using the results from the BOMA 2013 Experience Exchange Report, the group compiled a list of the most and least expensive commercial real estate city-markets in the United States. The annual report aggregates rental income and operating expense figures from the previous year; in 2012, data was gathered from more than 5,300 buildings across 250 markets and 115 cities in the United States and Canada.
Five most expensive city-markets – total operating expenses:
1. Stamford, Conn. $16.11 per square foot (psf)
2. New York $11.80 psf
3. Grand Rapids, Mich. $11.16 psf
4. Newark, N.J. $10.34 psf
5. San Francisco $9.66 psf
Five least expensive city-markets – total operating expenses:
1. Stockton, Calif. $3.57 psf
2. Fresno, Calif. $3.61 psf
3. Huntsville, Ala. $4.31 psf
4. Virginia Beach, Va. $4.64 psf
5. Albuquerque, N.M. $4.80 psf
Total operating expenses incorporate all expenses incurred to operate office buildings, including utilities, repairs and maintenance, roads and grounds, cleaning, administration, and security. Fixed expenses include real estate taxes, property taxes and insurance.
There was a 3.9 percent overall decrease in total operating expenses from 2011 to 2012, underscoring an industry focus on maximizing building efficiency in the face of dwindling income streams. For example, New York, which topped the list of most expensive markets for operating expenses last year, saw a decrease of $0.66 per square foot.
Five most expensive city-markets – total rental income:
1. Washington, D.C. $44.30 psf
2. New York $39.00 psf
3. San Mateo, Calif. $34.96 psf
4. San Francisco $34.49 psf
5. Santa Monica, Calif. $34.04 psf
Five least expensive city-markets – total rental income:
1. Macon, Ga. $8.16 psf
2. Shreveport, La. $11.18 psf
3. Columbus, Ohio $12.09 psf
4. Huntsville, Ala. $12.81 psf
5. Little Rock, Ark. $12.81 psf
Total rental income includes rental income from office, retail and other space, such as storage areas.
While average rental income has dropped somewhat, decreasing 2.9 percent from 2011 to 2012, building owners and managers are compensating for these income losses with greater reductions in expenses.
The Experience Exchange Report is the premier income and expense data benchmarking tool for the commercial real estate industry. The EER allows users to conduct multi-year analysis of single markets and select multiple cities to generate state and regional reports. It also offers the capability to search by building size, height, age and more for broader analysis. Subscriptions are available at www.bomaeer.com.
About BOMA International
The Building Owners and Managers Association (BOMA) International is a federation of 93 BOMA U.S. associations, BOMA Canada and its 11 regional associations and 13 BOMA international affiliates. Founded in 1907, BOMA represents the owners and managers of all commercial property types, including nearly 10 billion square feet of U.S. office space that supports 3.7 million jobs and contributes $205 billion to the U.S. GDP. Its mission is to advance the interests of the entire commercial real estate industry through advocacy, education, research, standards and information. Find BOMA online at www.boma.org.
Related Stories
| Jan 28, 2014
Big Ten Conference opens swanky HQ and museum [slideshow]
The new mixed-use headquarters includes a museum, broadcast studios, conference facilities, office spaces, and, oh yeah, a Brazilian steakhouse.
| Jan 27, 2014
A climber's dream: Rock climbing hall planned near Iran's highest peak
Forget the rock climbing wall. A developer in Iran is building a rock climbing hall. That's right, an entire building dedicated to the sport, with more than 48,000 sf of program space.
| Jan 24, 2014
First look: Foster + Partners' new home for Yale School of Management [slideshow]
Edward P. Evans Hall, the new home of the Yale School of Management, has opened for business. The 242,000-sf facility was designed by Foster + Partners, with Gruzen Samton as architect of record.
| Jan 24, 2014
Reed Expansion Index predicts widespread economic improvement for the year
Reed's December Expansion Index stood at 1.48, indicating overall construction in the United States is expected to grow over the next 12 months.
| Jan 24, 2014
Urban Land Institute, Enterprise outline issues in rental housing shortage: Report
Bending the Cost Curve: Solutions to Expand the Supply of Affordable Rentals outlines factors that impede the development of affordable rental housing – causing the supply in many markets to fall far short of the demand.
| Jan 24, 2014
Structural concrete requirements under revision: ACI 318 standard
The American Concrete Institute (ACI), an organization whose mission is to develop and disseminate consensus-based knowledge on concrete and its uses, is finalizing a completely reorganized ACI 318-14: Building Code Requirements for Structural Concrete.
| Jan 23, 2014
Adrian Smith + Gordon Gill-designed Federation of Korean Industries tower opens in Seoul [slideshow]
The 50-story tower features a unique, angled building-integrated photovoltaic (BIPV) exterior designed to maximize the amount of energy collected.
| Jan 23, 2014
Think you can recognize a metal building from the outside?
What looks like brick, stucco or wood on the outside could actually be a metal building. Metal is no longer easily detectable. It’s gotten sneakier visually. And a great example of that is the Madison Square retail center in Norman, Okla.
| Jan 22, 2014
SOM-designed University Center uses 'sky quads,' stacked staircases to promote chance encounters
The New School's vertical campus in Manhattan houses multiple functions, including labs, design studios, a library, and student residences, in a 16-story building.
| Jan 22, 2014
Architecture Billings Index sees first back-to-back decline since mid-2012
The AIA's Architecture Billings Index dipped for the second consecutive month in December—the first consecutive months of contraction since May and June of 2012.
